Posted 7 months ago | by Ben Armstrong
Most Crypto Exchanges Are Not Fully Secured By Design – According to Bybit CEO
Following the KuCoin attack by hackers, crypto exchange security is a hot topic. Bybit CEO Ben Zhou said that the event should not surprise people, as exchanges are insecure by design.
In his interview with media, the CEO said that crypto exchanges operate as a potential risk, or "a single point of failure" posed in the design. As a centralized network, exchanges are vulnerable to the same security problems as all other sites.
Crypto exchange security is now under great deal of pressure to protect investors and traders from growing crypto attacks. Sadly – whenever there are these kinds of risks – there will be some amount of losses to hackers.
Bybit CEO Sees Danger
Zhou further mentioned the fact that hot wallets are in charge of holding digital currencies in the vast majority of the servers and storage networks, which opens the door for robbery if not properly secured.
The CEO claims that a system of cold wallets is better because they are not connected to the Internet and more secured against hacking.
The only drawback is that you can not remove huge amounts of crypto automatically from an exchange with these systems. According to Zhou, investing in security , particularly if the platform functions online, should be a priority on the agenda of any exchange.
Improvements Can Likely be Made
Exchanges will need to properly resolve areas of vulnerability and use various security layers to conduct penetration testing to tackle possible malware threats.
Any protection framework should also secure information at all contact points. This would ensure the user data is not tracked, accessed, sold and exchanged from the platform.
“This can be accomplished by applying best practices for application lifecycle management, hiring knowledgeable and reputable security consultants for penetration testing and running bounty programs within the white hat community to identify any potential vulnerabilities.”
Security audits are also suggested to apply stringent management processes and to invest in a zero confidence architecture, with credible security companies.
New Ways to Keep Crypto Safe
Zero-trust architecture involves testing to avoid possible infringements on both the internally and the externally for those using a service, according to Zhou.
He said although it was possible for third-party vendors to use some tailor-made safety solutions, they could also be produced internally.
For security concerns, Bybit has prepared by investing in the development and enhancement of its own security protocols and solutions.
As revealed by Zhou, the exchange has introduced a cold wallet system with multiple signatures to secure the protection of the funds of users.
“Even when it comes to withdrawals, we subject any requests to at least three layers of risk-control verifications. Crypto asset consolidation among cold wallets follows the strictest policy, including physical environment security, system security, encryption techniques, operation authentication, monitoring and audit.”
In the battle against possible hacking threats, Bybit has coordinated and operated a range of red alert scenarios and bounty programs with the group of white hat hackers. This means few bugs in the system – and quick fixes when one is found.
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